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Chairman John Barton, who retires this summer, said ‘as anticipated’ it had been a challenging year for the business.

He said: “While total sales for Next Retail declined by 2.9 per cent, sales for Next Directory increased by 4.2 per cent.

“We have continued to invest in the business, spending £161 million on new stores, warehousing and systems.

“Net debt increased to £861 million, well within our bond and bank facilities of £1.4 billion.

“The strength of the group is built on the hard work and dedication of all the people who work for Next.

“I would like to thank them all for their contribution throughout the year. I have been chairman of Next since May 2006.

“In 2008 our profits fell and our share price halved – by the following year our profits had started to grow again and our share price recovered strongly in the following years.

“Trading conditions in the year ahead will continue to be tough, however I believe that by focusing on our core strengths, as we did during 2008, we will see Next emerge from this period stronger than before.”

In the full year results a spokesman for the business said: “Next brand total sales were level with last year, full price sales were down 1.3 per cent.

“Directory has performed better than retail as customers continue to shop more online.

“In addition, directory benefited from improved stock availability, enhanced website functionality and the continued growth of LABEL and Directory overseas.

“Our ranges continue to be at the heart of everything we do.

“In our half-year report in September 2016, we explained how we were adapting our buying processes to increase the speed with which we react to new trends.

“We have made a great deal of progress in this area.

“Our buying teams are now developing new products and making buying decisions faster, taking products from concept to shop floor in much shorter timescales.

“In many cases we have reduced the product development times by three months.

“These gains can be even greater where our buyers have pre-ordered fabric and have it available to use at the time they order an item.

“Where we have used these new buying techniques they have proved successful.

“However, in focussing so much energy on changing our buying culture, processes and adopting exciting new trends, we have omitted some of our best-selling, heartland product from our ranges.

“These are the easy to wear styles that can be delivered in large volumes and great prices across several colours.

“We identified this issue in January.

“Corrective action is relatively straightforward and began in late January.

“We believe that some of these changes will begin to be reflected in our summer ranges from May onwards, but we will not have our ranges where we want them until the autumn season - September onwards.”